As the domestic stock market plummeted today (July 28), the Kospi 200 Volatility Index (VKOSPI), often referred to as the "Korea-version fear index," rebounded to surpass the 80 threshold for the first time in 7 trading days.

According to the Korea Exchange, as of 10:30 a.m. today, the VKOSPI stood at 80.23, up 3.46% from the previous session.

During the intraday trading, it briefly spiked to as high as 80.24.

The VKOSPI measures expected market volatility reflected in option prices and is dubbed the "fear index" because it tends to surge when the Kospi plummets.

Previously, the VKOSPI spiked to an intraday high of 83.58 on March 5, immediately after the outbreak of the war involving Iran, before stabilizing for a period and dropping to an intraday low of 46.54 on April 14.

However, it subsequently turned upward, surpassing the 90 mark on June 9 and soaring to 97.99 on June 29, marking its highest level since the global financial crisis.

It then turned downward again, extending a six-day losing streak from the 21st of last month through the previous day.

Driven by this downward trend, it slipped below the 80 mark on July 24 and fluctuated in the 70s before turning upward once more today.

The downturn appears to have been influenced by a sharp simultaneous slump in the domestic stock market as major semiconductor shares faltered.

Currently, the Kospi is trading down 8.04% at 6,212.26, while the Kosdaq index is also down 6.51% at 715.04.

Amid the sharp market decline, sidecars (temporary suspension of program sell orders) were successively triggered this morning on both the Kospi and Kosdaq markets.

Subsequently, circuit breakers, which temporarily halt Kospi trading, were also activated.

This was driven by selling pressure prompted by weakness in semiconductor shares on Wall Street overnight.

Reports that China has begun developing deep ultraviolet (DUV) lithography equipment used in semiconductor manufacturing spread concerns over intensifying global competition, causing the Philadelphia Semiconductor Index to drop by 2.23%.

SK Hynix's American Depositary Receipts (ADRs) also tumbled by 7.47%.

Currently, Samsung Electronics has plunged 9.45% down to the 230,000-won range, while SK Hynix has also tumbled 11.01% down to the 1,600,000-won range.

However, experts view that today's steep decline is excessive relative to fundamentals.

Han Ji-young, an analyst at Kiwoom Securities, pointed out, "In the process of facing serial adjustments, the stock market's own immunity has weakened, and as stock prices fall, there is a psychological tendency to look exclusively for negative factors."

She explained, "The current plunge is largely excessive. A realistic slowdown in fundamentals such as earnings has not yet occurred, and technical indicators such as valuations and the Relative Strength Index (RSI) all point to overselling."

Kim Dong-won, head of research at KB Securities, also forecasted, "Next year will be the period experiencing the most acute supply shortage in semiconductor history. The fundamentals of the memory sector remain solid. Considering this, excessive concerns over the memory market conditions will quickly dissipate."

He further emphasized, "Given that valuation burdens for Samsung Electronics and SK Hynix have eased due to the recent decline in stock prices, the current timing presents an opportune moment to buy."

Amid these conditions, expectations are rising that the earnings announcements of major semiconductor firms, starting tomorrow, could serve as a catalyst for a stock price rebound.

SK Hynix will release its second-quarter earnings on July 29, followed by Samsung Electronics disclosing its finalized second-quarter results on July 30.

Additionally, second-quarter earnings for U.S. big tech giants including Meta, Microsoft, Amazon, and Apple are scheduled to be announced this week.

Analyst Han Ji-young projected, "We can seek a turnaround in sentiment through the earnings reports of market-leading stocks scheduled starting tomorrow."